Gaddafi's son builds 'Hong Kong' in Libya

Foreigners to be welcomed in creation of 'semi-independent' city

Libya is to build a multi-billion-dollar, hi-tech enterprise city intended to be a Western version of Hong Kong.

Al-Saadi Gaddafi, 33, a son of the North African country's dictator, Colonel Muammar Gaddafi, said he hoped the "semi-independent" city would act as a magnet for foreign investment and speed up development of the oil-rich state, which is seeking a bigger role on the world stage.

The city would offer easy access, low taxes, offshore banking and a liberal social regime that would allow a variety of faiths, he said. "We would like to create an environment that enables investors to make projects like they do in Paris, New York and London," he said.

"This is a historic decision. We are talking about two systems and one country."

The city is to be constructed near the Tunisian border and is expected to occupy a 40 kilometre stretch of coastal desert.

UK engineering group WS Atkins has already been called in to help with what Mr Gaddafi called "the masterplan". Also in the frame is the Dubai-based Emaar, which is currently building Burj Dubai, the world's tallest tower. It is hoped Emaar will focus on building the infrastructure and helping to contact other investors. The first development, possibly a tourist resort, should start "in a maximum of two years", Mr Gaddafi said.

He added that he would return from his current home in Italy to live in the new city and expects to be closely involved with administering the project. He confirmed that the scheme had the backing of his father.

Mr Gaddafi sees the plan as a "practical" way to "solve many problems in our lives in Libya". Under the present system, "we have many conferences, many meetings, we create many institutions for investments and investment laws. But nothing happens. The bureaucracy is slow and a bit backward."

The move is the latest in a series of policy U-turns that have brought the vast but sparsely populated country back into favour with the West after long years of being ostracised.

Mr Gaddafi said the zone would not just be for commerce and spoke of establishing joint ventures in education and medicine. "If, for example, we did an American-Libyan university there, or an English-Libyan hospital, this would do a lot to train and help the Libyan people."